September 28, 2018 / 5:25 PM / in 8 months

Breakingviews - Data is new beat for transatlantic antitrust cops

An illustration picture shows a projection of text on the face of a woman in Berlin, June 12, 2013. REUTERS/Pawel Kopczynski

WASHINGTON (Reuters Breakingviews) - Data is the new shared beat for transatlantic antitrust cops. Europe’s competition chief Margrethe Vestager and her U.S. Justice Department counterpart Makan Delrahim worry concentrations of personal information may be used to stifle competition. She has been the tougher one so far, but the common focus could hurt tech giants like Facebook and Alphabet that depend on data for profit.

U.S. officials are belatedly weighing whether America needs tougher antitrust enforcement after seeing the European Commission slap a $5 billion fine on Alphabet unit Google, relating to favoring its own apps over rival services. When it comes to the collection of personal data, they are already more in agreement. At an Axios event on Friday, Delrahim said data is a “huge asset” that a tech giant could use to shut out new rivals. In a merger review, user information could be subject to forced divestiture, just like other assets, or cause a deal to be blocked.

Vestager echoed Delrahim’s comments. She cited Facebook’s 2014 acquisition of WhatsApp for $19 billion, when the companies said their platforms couldn’t automatically match user data, when technically they could - attracting a European Commission fine last year. In a Forbes interview published on Wednesday, WhatsApp cofounder Brian Acton said Facebook coached him to mislead the commission. Without her colleagues’ competition analysis, the merger itself could have been put at risk, Vestager said.

Facebook has become only bigger since then, with more than 4 billion monthly users between its namesake platform, WhatsApp and Instagram, though some accounts overlap. Facebook doesn’t break out revenue for Instagram, but eMarketer estimates it will bring in $8 billion in ad sales alone this year. The data gleaned from users make Facebook a digital advertising powerhouse, together with Google accounting for more than half the market. Hacks, like the one potentially involving 50 million accounts revealed by Facebook on Friday, only underline the scale of data collection.

By 2020, Amazon will be the third largest digital ad player, according to eMarketer. Amazon’s data collection may be the next target for Vestager. She’s examining the e-commerce firm’s gathering of third-party merchant information while also seeking to sell the same products as those businesses. In Brussels there’s talk of whether such dominance warrants breakups, even if for now other tools have sufficed. Data will weigh more and more heavily on both sides of the antitrust ocean.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

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